1. How does one obtain flood insurance?
In communities that participate in the NFIP, a flood insurance policy may be purchased from one of these sources: a licensed insurance agent or broker in good standing in the State in which the agent is licensed or an agent representing a Write Your Own (WYO) company that is authorized to sell flood insurance policies.

The process works as follows: (1) The agent and the applicant complete the flood insurance application; (2) The applicant provides necessary documentation, such as an Elevation Certificate; and (3) These documents and the full premium are sent to the NFIP or provided to the WYO; (4) The insurance policy is issued.

2. What are the limitations to the insurance protection provided by flood insurance?
Flood insurance purchased through the NFIP provides the most comprehensive insurance protection available against flooding. The policy pays for direct physical loss to the insured building by or from flood damage, excluding personal contents. (Personal contents coverage may be purchased separately.) Additionally, a loss in progress is not covered by a new flood insurance policy. Be sure to review the flood insurance policy in detail to confirm what is covered and what is excluded.

3. Can flood insurance be purchased in an amount that exceeds the standard NFIP policy limit?

Flood insurance through the NFIP is limited to the statutory limits (currently $250,000 structure/$100,000 contents for residential buildings; $500,000/$500,000 for non-residential). For property owners seeking additional coverage, "excess flood" coverage may be available. Unlike federal flood insurance, excess flood policies are underwritten by private carriers, so the amount and limitations of coverage varies. One company may write policies up to $75 million; another $1 million; another may only offer $250,000 above the NFIP limit. Annual premiums may range from a few hundred dollars to several thousand dollars..

4. Is there a waiting period before a flood insurance policy becomes effective? Are there exceptions to the waiting period?
For new insurance policies, there is a standard 30-day waiting period; the policy becomes effective on the thirtieth calendar day from the date of the application and the presentment of payment, provided that the NFIP receives the application and payment within 10 days of the application date. The Congressional intent behind this statutory waiting period is to prevent the purchase of flood insurance at times of imminent flood loss.

However, if the application for flood insurance is associated with loan activity, a requirement by the lender, or the remapping of the subject property's community, then the 30-day waiting period does not apply. If the purchase of flood insurance is in connection with the making, extending, increasing, or renewing of a loan, then the flood insurance becomes effective at the time of loan closing, provided that the application and the presentment of payment is made at or prior to loan closing.

In cases where a lender determines that flood insurance is required of a mortgagor who does not currently have insurance on the property, then the flood insurance policy becomes effective upon the completion of the application and the presentment of payment. When a property is remapped and placed into a Special Flood Hazard Area, then completion of the flood insurance application and presentment of payment made within 13 months of the map revision date will make the policy effective as of the day following the application and payment date.

5. How is the flood insurance premium determined?
Flood insurance rates are set by the NFIP; therefore, an NFIP representative, WYO carrier or independent agent should quote the same premium. Flood insurance premiums are determined by a building's age, design, occupancy, flood zone, and building elevations compared to flood elevations (for buildings within the Special Flood Hazard Area.) The premium is also based on the amount of coverage purchased and can be lower or higher depending on the community's status. Keep in mind that the NFIP adds standard fees to all policies.

For more information on rating a policy or on locating an insurance agent in a particular area, visit FEMA's FloodSmart website.

6. When is an Elevation Certificate required for the rating of a flood insurance policy?
An Elevation Certificate, or other elevation documentation certified by a surveyor or engineer and authorized by FEMA, is required if the building is post-FIRM, located within a Special Flood Hazard Area, and within a community that participates in the NFIP's Regular Program.

7. What is a pre-FIRM or Post-FIRM building?
For insurance rating purposes, the date of construction or date of substantial improvement (the date the permit was issued provided that construction begins within 180 days of the permit date) is utilized to determine if a building is considered "pre-FIRM" or "post-FIRM."

A building is considered pre-FIRM if the start of construction or substantial improvement was on or before December 31, 1974, or before the effective date of the community's initial Flood Insurance Rate Map. Therefore, a post-FIRM building is one with a date of construction, or substantial improvement, after December 31, 1974 or on or after the effective date of the community's initial Flood Insurance Rate Map.

8. Are there different kinds of flood insurance policies?
The NFIP offers a Standard Flood Insurance Policy and a Preferred Risk Policy. The Standard Flood Insurance Policy has three policy forms: the Dwelling Form, General Property Form, and Residential Condominium Building Association Policy Form (RCBAP). Each policy form applies to properties based on the ownership type and occupancy.

The Preferred Risk Policy applies, with certain conditions, to owners and tenants of eligible buildings located in the low to moderate-risk zones of B, C, and X in communities that participate in the Regular Program.

9. When is the Dwelling Form of the Standard Flood Insurance Policy used?
The Dwelling Form covers only non-condominium residential buildings built principally as a dwelling for one to four families or for a single-family dwelling unit within a condominium building. The Dwelling Form pays losses on Replacement Cost value for buildings used as primary residences, which are insured at least to 80% of the building's replacement cost. Separate contents coverage for personal property inside a building at the subject property is available for purchase with this form, as well.

10. When is the General Property Form used?
The General Property Form covers commercial buildings or residential buildings that are not condominiums, including timeshares and cooperatives. Losses are handled on the basis of the building's Actual Cash Value. Contents coverage is available for these buildings.

11. When is the Residential Condominium Building Association Policy used?
The Residential Condominium Building Association Policy (RCBAP) is specifically designed for condominium associations to insure residential condominium buildings and its commonly owned elements. This policy covers condominium buildings located within communities that participate in the NFIP's Regular Program and have 75% or more of the floor area dedicated to residential use. These buildings can be detached single-family buildings, row houses, townhouses, or low-rise and high-rise buildings.

12. Why do borrowers need to obtain an elevation certificate?
An elevation certificate is generally needed for one of two reasons:

1. In order to determine the correct premium for a flood insurance policy.
2. When a property owner wishes to apply for a Letter of Map Amendment with FEMA to have their home or other structure officially "removed" from a SFHA.



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